The Not So Basic Types of Car Insurances That You May Not Have Heard of Yet

Auto insurance is a contract between the owner of the vehicle and the insurance company that protects them against financial losses in case of an accident or robbery. The extent of the insurance coverage is often customizable, allowing you to create a copy based on your needs and budget. These terms are issued for six to 12 months, after which they must be renewed.

The Basics of Auto Insurance

Personal auto insurance that’s mandated in a majority of states in America typically includes coverage for (1) property, such as theft of or damage to the car, (2) liability, a legal responsibility towards other civilians in case of property damage or bodily injuries, and (3) medical, such as the cost of treating wounds, rehabilitation, holding a funeral, or compensating lost salaries.

Representation of a car crash

Types of Auto Insurances

Here’s diving deeper into all the different types of local car insurances offered in Indian Orchard:

1. Liability Coverage

As stated above, liability coverage is required as a legal requirement by most US states to be able to drive a car. It helps cover property damage and injuries you may have caused to others.

2. Collision Insurance

Collision insurance is an important type of car insurance, considering there are about five million car crashes in the United States each year. In 2020 alone, there were about 35,766 fatal vehicle crashes in the United States, of which 38,823 resulted in death. This type of insurance covers damages to your car when an accident or collision occurs with or due to another vehicle. The insurance agency may offer incentives for either replacing or repairing the covered vehicle.

Car collision with a tree

3. Comprehensive Insurance

This insurance type goes beyond collision insurance to add another layer of coverage in case of an accident involving another automobile(s). Apart from paying for damages caused to your car due to the collision, it may also help pay for vandalism or accidents caused due to animals and certain weather conditions.

4. Uninsured Motorist Insurance

Ever heard about ‘hit-and-run’ accidents? These are incidents in which one or more people flee from the crime scene, in this case, a collision, to avoid reporting the crash, providing sufficient information, or aiding another person involved in the accident. In 2016, there were 737,100 hit-and-run cases recorded in the United States, which translates to one happening every 43 seconds precisely.

The increasing rate of hit-and-run crashes and fatalities has given rise to suffering andeconomic and social burdens. It also highlights the severity of outcomes in case of delay in or the absence of immediate medical attention.

Uninsured motorist insurance protects the car and its passengers against uninsured motorists and damages born in a hit-and-run accident. In most states, uninsured motorist coverage is also applicable for reimbursement when the accident is caused by a driver who doesn’t possess auto insurance.

5. Underinsured Motorist Insurance

As a result of budgeting, drivers willingly choose to carry the minimum liability coverage. At the same time, this technique allows them to save money, but it may not provide ample coverage in an accident. Signing up for underinsured motorist insurance protects your vehicle if a collision occurs with a minimum liability coverage holder whose insurance can’t cover the cost of the damage.

6. Medical Payments Coverage

Medical tends to soak up a fortune in the case of an injury from an accident. A medical payment coverage helps payoff medical-related costs caused as a result of a covered accident. This is applicable regardless of which driver is at fault.

Hospital medical teams providing aid at the site of a major accident

7. Gap Insurance

It’s no surprise that car values are subject to depreciation; this is the difference between the prices when your first buy the car vs. when it’s time to sell it off.

Rumor has it that a brand new car begins losing value the minute you drive it off the forecourt. By the end of the year, you can expect even the best of cars to lose between 15 to 35 percent of their value depending on the miles driven, as well as newfound makes and models of the car. The value will likely differ by 50 percent or more in the next three years. Unfortunately, comprehensive and collision insurance only covers your car’s most recent market value rather than what you paid for. This results in the auto insurance settlements being insufficient for covering the costs of the loan.

The solution? Gap insurance. The gap here refers to the difference between what you owe for the vehicle and insurance coverage. This insurance type enables drivers to cover the amount owed on an auto loan in case of theft or loss. For leased cars, the payment is often rolled out as lease payments.

8. Rental Reimbursement Insurance

In case your car is no longer in the condition to be driven around town after an accident, rental reimbursement insurance can help pay for a rental car that you can drive in the meantime.

9. Towing and Labor Insurance

Towing a car

If you have comprehensive insurance, you can best believe that the towing and labor insurance will reimburse the cost of having to tow after an accident, alongside the labor costs that go into repairing your car. There is also a special glass coverage that offers coverage for windshield damage.

10. Personal Injury Protection Insurance

Depending on the limits of the insurance policy you may have selected, personal injury protection covers a major chunk of medical expenses and other consequential expenses related to the covered accident. Not only does this cover the driver, but also all other passengers residing within the vehicle. It may also compensate the policyholder for any loss of income caused as a result of not being able to work.

What is the Average Cost of Insuring a Car?

In the United States of America, $1,553 is presumed to be the average cost of personal car insurance in 2022. However, that may not always be the actual pay for insuring your car since each auto insurance provider quotes the rate for insurance based on several factors. The most prominent factors an insurance agent weighs in on are age, credit score, driving history, location, and vehicle type.

Get Auto Insurance in Indian Orchard

Western Mass Auto Insurance is a team of auto insurance agents in Indian Orchardoffering full-service local and personal car insurance. This insurance providerpromises free quotes, no obligation, and low down payments when inquiring about auto insurance. The car insurance agents can process your insurance and license plate in as little as 15 minutes! Their car insurance agents also insure business vehicles.

Request a free car insurance quote in Indian Orchid.